Money Sweetspot leads customers out of debt and towards brighter financial futures

Established: 2021

Industry: Financial services

No. of employees: 5

Introduction

Money Sweetspot is a social finance company that wants to lose customers. One of the first organisations in the world to link a debt consolidation to financial education. The team operates from the premise that people are good. By listening to a customer’s story, the team can reduce the inherent judgement that the financial system has (which may only look at transactions and scores). Money Sweetspot combines the human story, the financial reality, and financial education through nudge, together to support families out of high cost and damaging debt, so that they have choices about the next chapter in their financial lives.

Challenge

People are good. Bad things can happen to any of us. The financial system discriminates against people for what life inherently is - unpredictable. This means that people become underserved or excluded when bad things happen, this is harmful and spreads wider than just debt. There is a better way. Money Sweetspot has brought the human back to the heart of lending by understanding a customer’s story and celebrating when they lose customers.

Solution

Money Sweetspot provides financial resets to New Zealanders out of high-cost debt that link to rewards for engaging in nudge’s financial education, and donations linked to their customers ongoing commitment to their financial reset.

Money Sweetspot is one of the first in the world to do things this way. Utilizing financial education and content to earn points that are redeemed off a customer's loan or into their savings creates the opportunity for positive financial habits and choices on learning paths. In this way, Money Sweetspot walks alongside their customers in their financial reset journey - rather than acting like their parent. They link the loan to financial education, incentivise engagement and celebrate successes along the way.

People can pay their loan through engaging in financial education (rather than cash) if they need to. Money Sweetspot can do this because they’re funded as a social enterprise and exist for purpose and financial sustainability rather than profit.

Outcome

The social return on investment is $7 for every $1 invested in Money Sweetspot. The team complete qualitative narrative research on reasons for the financial reset, monitor customers engagement with financial content, and track loan repayments. The team also look at the frequency and focus of engagement in nudge’s financial education and their local financial resources as an indicator of progress on their customer's financial reset.

On average, their customers are paying $17k less interest for each $25k of lending through their innovative linkage between lending, financial education, rewards, and community outcomes. A new business that packs a punch. This is evidenced through their investor network, community and partnerships.